Energy Price Forecast Winter 2021: Covid-19 aftermath, harsh weather and low supplies all point to rising Energy Bills

Energy market analysts are forecasting a winter of discontent for UK energy bill payers as energy suppliers are expected to hike their prices following a surge in demand from Asia and Europe. 

Why the surge in energy prices?

Energy Price Cap to rise to record high

Market analysts are also predicting that Ofgem will raise the energy price cap in the winter in an attempt to support energy suppliers that are likely to struggle to keep costs down in the face of high wholesale energy prices.

Unfortunately, this will mean an extra hit to the wallets of consumers with everyone in the UK expected to be impacted.

“It looks likely that we will see a substantial rise in the winter price cap following a considerable rise in wholesale energy costs, rising to some of the highest seen since the ‘beast from the east’ in 2018. Wholesale prices have been hit by a combination of factors such as the rising global price of gas shipped on liquified natural gas tankers, and the higher cost of European carbon prices, which will keep the UK’s energy prices high,” said Craig Lowrey, senior consultant at Cornwall Insight.

For the coming winter, Ofgem is expected to lift its cap for the average dual-fuel energy bill from £1,138 a year to £1,250 a year, up by £112.

Also read: Ofgem Hikes Energy Price Cap raising Energy Bills to pre-pandemic levels

Update: The energy regulator Ofgem has confirmed that the energy price cap will rise by a record amount in October with the default tariff cap to rise £139 from £1,138 to £1277 and prepayment customers will see an increase of £153 from £1,156 to £1309.

What does this mean for energy bills?

As a result of these factors winter energy bills could see hikes of more than £110 per year with a standard gas and electricity bill predicted to climb to an average of £1250 a year.

“I have never seen the energy market like this before. Wholesale prices, which energy firms pay, have rocketed. The cheapest fixed deals are approximately £100 a year more now than they were just three months ago, and £200 a year more now than they were a year ago,” said Martin Lewis, the founder of Money Saving Expert in an interview with the BBC.

Energy suppliers will need to consider how they will handle issuing price rises to their customers as many will struggle to pay extra. There is already a high number of consumers struggling to pay off their energy bills and bad debt levels remain high across the board.

Also read: How should Energy Suppliers explain Energy Bill Increases?

Update: A new report from Imperial College London and commissioned by Drax has warned that an extra 500,000 households will fall into fuel poverty this winter. Calls for a social tariff to assist the most vulnerable has grown as the winter months draw closer.

Update 15/09/2021: Seven energy suppliers have exited the market so far in 2021. The latest being People's Energy and Utility Point.

Dyball Associates energy supplier CRM system incorporates an energy billing system that allows the scheduling and ad hoc bill production to the suppliers branded billing templates.

Bills can be run via automation through the system and any errors and exceptions are quickly identified and quarantined to be resolved by the billing team.

In short, our CRM helps an energy supply business automate their billing and collection processes.

Further Reading

How to Start An Energy Supply Company

What are the Digital Tools an Energy Supplier should use to attract more customers?

How should Energy Suppliers explain Energy Bill Increases?

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